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Cendant Corp. chairman Walter Forbes handed in his resignation yesterday as did 10 of 14 directors who were formerly involved in CUC International. The mass resignations come in the wake of accounting fraud which occurred just prior to CUC’s merger with HFS last December. Cendant CEO Henry Silverman was also named chairman yesterday to replace Forbes. There were indications yesterday that Cendant will restate earnings for the past three years due to the extensive accounting fraud at CUC, which included $300 million in phony revenue booked just prior to its HFS merger. A revised earnings report will be issued next month. The Wall Street Journal reported this morning that, according to its sources, Forbes will receive $48 million in severance including $35 million in cash.

American Express Company announced Tuesday that Richard A. McGinn, chairman and chief executive officer of Lucent Technologies Inc., has been elected to the Board of Directors of American Express.

“Richard has provided outstanding leadership to Lucent, developing it into one of the world’s most successful growth companies,” said Harvey Golub, chairman and chief executive officer of American Express. “He will be a strong addition to our Board.”

Mr. McGinn, 51, was named chairman of Lucent Technologies in February, 1998. He previously served as chief executive officer and president of Lucent — which he helped launch as a spin-off from AT&T in 1996. Mr. McGinn joined AT&T in 1978 and subsequently held executive positions in AT&T’s International and Computer Systems Groups before becoming chief executive officer of Network Systems. He began his career at Illinois Bell in 1969.

In addition to serving on the Board of Directors of Lucent Technologies, Mr. McGinn is a director of Oracle Corporation. He is a member of the Executive Committee of the Council on Competitiveness, a bipartisan policy group. Mr. McGinn received a bachelor’s degree from Grinnell College, Grinnell, Iowa.

American Express Company (), founded in 1850, is a global travel, financial and network services provider.

PaymentNet (previously Segue Systems), an established vendor in the wide open market for electronic payment processing over the Internet, announced Monday general availability of its automated payment processing service.

The PaymentNet Service has been deployed across a range of merchant customers (listed below) with excellent results, and has proved its value to key payment processing, banking, ISP/distribution and technology partners. It represents a powerful alternative for merchants who have been disappointed by slow, cumbersome, inefficient and costly Internet-based payment processing solutions that have their architectural and feature origins in the “pioneering” era of Internet payment technologies.

Key Relationships in Place

PaymentNet’s service is production-quality and already broadly deployed. It has proved compelling enough to enroll key players across the spectrum of the payment processing infrastructure and to attract a range of large, leading-edge merchant customers. Following is a partial list of early PaymentNet customers and business partners:

The PaymentNet system is based on a client/server architecture, and is deployed using a true thin client binary executable. PaymentNet leverages the Internet as a virtual private network between its proprietary payment processing server and individual clients dispersed on Internet and Intranet locations.

According to benchmarks conducted by PaymentNet customers, merchants using the PaymentNet service get lower cost of service and orders-of-magnitude faster processing speeds (benchmark specifics available from PaymentNet). They also get advanced services like delayed transaction settlement for delayed product fulfillment, secure credit card number storage, and a range of highly automated account management, processing and reporting functions.

Network Solutions, Inc. (NSI), supplier of all Internet domain names, and an early PaymentNet customer, processes all of its Internet transactions using the PaymentNet service. “Critical to the success of our Internet-based activity is throughput capacity, system performance, processing response time and system integrity and reliability,” stated Scott Williamson, Vice President Product Development, NSI.

“PaymentNet’s service and the attention to details exhibited by their organization has made this program a success for our customers.”

PaymentNet Service Details

By visiting the PaymentNet Web site and subscribing to one of PaymentNet’s annual service plans, based on transaction volume, any merchant – large or small, ISP-hosted or self-hosted — can quickly and cost effectively start accepting payment for products and services over the Internet.

The PaymentNet solution is enabled through its thin client (a binary executable of less than 100kb), which is integrated to the merchant’s web store using CGI scripts, or via an application programming interface. The information and effort required to integrate PaymentNet is minimal and is primarily related to transaction authorization.

The PaymentNet service includes back-end account management to assist merchants with their business operations. Each merchant is provided with secure, private access to a transaction management site that provides: a desktop virtual terminal, daily transaction reports, credit authorizations, delayed settlement for traditional packaged goods compliance rules with VISA and MasterCard, partial order settlement management, and overall account details.

For large merchants with sophisticated established payment processing systems, PaymentNet offers custom system integration services. For small merchants hosting their Web stores with Internet Service Providers, PaymentNet offers simplified storefront integration programs.

About PaymentNet

PaymentNet, Inc. is a provider of highly automated, Internet-based, real-time payment processing services for merchants of all sizes and business approaches. PaymentNet is headquartered in Pleasanton, California, and can be found on the Web at [www.paymentnet.com][1]. Contact PaymentNet corporate offices at 925/225-1670.

BestBank, which was shut down Thursday by the Colorado State Banking Commissioner, was acquired by Pueblo Bank & Trust yesterday. Pueblo bought BestBank’s insured deposits and about $47 million in assets. The FDIC has taken over the 500,000 sub-prime and secured credit card accounts representing $225 million in receivables. The FDIC said yesterday it is now taking offers for the card portfolio and hopes to unload the accounts within the next three to four months. Interested parties should contact the FDIC at BestBank’s Boulder office over the next few weeks. After that contact should be made at the FDIC’s Dallas office. Typical BestBank cardholders carry balances of $350, charge about $500 annually, and pay annual fees of about $75. Meanwhile, the Colorado Banking Commission said yesterday that besides being grossly insolvent, BestBank operated nationwide, had an undue reliance on a third party and suffered from a severe lack of controls. The Commissioner said it is highly unusual for a bank to be shut down on a Thursday instead of a Friday but the situation required the immediate action. The fallout of the failure could have repercussions for its processor, First Independent Computers, which derives more than 80% of its revenue from the BestBank contract. Meanwhile, The Credit Store Inc., which recently sold some of its sub-prime card loans to BestBank, announced yesterday it is switching independent auditors, from Salt Lake City-based Tanner+Co. to Grant Thornton, effective immediately.

Transaction Systems Architects, Inc. has received notification that the U.S. Department of Justice, Antitrust Division has completed its review under the Hart-Scott-Rodino Antitrust Improvements Act of TSA’s acquisition of IntraNet, Inc. The Justice Department has approved TSA’s acquisition of IntraNet, Inc. Transaction Systems Architects, Inc. anticipates closing the IntraNet, Inc. acquisition as soon as possible.

Transaction Systems Architects software facilitates electronic payments by providing consumers and companies access to their money. Its products are used to process transactions involving wire transfers, credit cards, debit cards, smart cards, home banking services checks, as well as automated clearing and settlement. Transaction Systems’ solutions are used on more than 3,000 product systems in 69 countries on six continents.

American Express drove the stock market up yesterday with an impressive second quarter report showing net income climbed 11% to $578 million. Net income in the TRS unit soared 18% to $360 million as revenue bumped up 7.9% to $3.27 billion. AmEx’s partnerships with 35 international banks was the driving force as cards issued outside the U.S. grew by more than 13.1% . AmEx stock closed at $112.81, a 5.4% one-day spike. For the second quarter U.S. card volume hit $41.4 billion, an 11.4% jump over 2Q/97 while U.S. card loans increased by 12.7% to $14.8 billion. At the end of the second quarter, total cards-in-force for the U.S. dropped slightly to 29.6 million while cards-in-force outside the U.S. climbed to 14.2 million. Average volume per cardholder for the second quarter was $1717, a 7.2% increase, while the average fee per cardholder dropped nearly 3% to $38. U.S. 30+ day delinquency was 3.4% of total card loans and net chargeoffs rose to 6.6% from 6.0% a year ago. For complete details on the American Express report visit www.carddata.com and selected ‘Current Earnings Report’.

The pioneering ‘NextCard’, a/k/a the ‘First True Internet VISA’, launched two major program upgrades Monday. Cardholders now have the option of upgrading to ‘NextCard Rewards’ and to the ‘Platinum Card’. ‘NextCard’ , run by San Francisco-based Internet Access Financial Corp, is the only ‘VISA’ card offered with 30-second online approvals and online customization of terms and enhancements by the cardholder. Unconstrained by legacy systems, ‘NextCard’s’ cutting-edge direct marketing, ‘RapidResults’, has generated 200,000 applications in its first six months. Yesterday’s new ‘NextCard Rewards’ enables cardholders to earn up to two airline miles for every dollar spent, with no annual fee. ‘NextCard Rewards’ may be redeemed for airline miles with seven domestic and international airlines, including Alaska, Northwest, TWA, and British Airways, as well as merchandise from The Sharper Image, The Gap, Barnes & Noble, MCI, 1-800-FLOWERS and many other online and offline merchants. In addition to the ‘NextCard Rewards Program’, many cardholders now have the opportunity to choose a ‘Platinum VISA’ design with their upgrade. San Francisco-based Intellipost Corp. is the provider of the rewards program which is marketed under the name of ‘Bonus Rew@ards Credit’ and ‘BonusMail’.

Affinity Partners, Inc., a marketing company specializing in affinity and partnership marketing programs, has received a First Place Award in the 1998 PRIMA Awards competition sponsored by the American Society of Association Executives in Washington, DC.

The company won top honors in the newsletter category for PartnerCard Advisor, its quarterly newsletter on trends and developments in affinity credit card programs. Since it was founded in 1996, PartnerCard Advisor has become a highly trusted source among association executives for information and techniques about enhancing the success of association-endorsed credit cards. This is the publication’s second PRIMA Award.

The PRIMA Awards (Promoting and Recognizing Innovation in Marketing to Associations) honor organizations that provide services to the association industry. This year’s competition drew over 120 entries in eleven categories. Editor-in-Chief Wendy D. Hill will accept the award at a special ASAE presentation in Nashville in August.

Affinity Partners is a privately held company with in-depth expertise in creating and marketing affinity programs. The company’s co-founders, Mr. Novotny of Wellesley, MA and Steven L. Marcus of South Natick, MA, are pioneers in the affinity credit card industry. Affinity Partners offers a wide array of member benefit services in partnership with leading national companies, including First USA Bank, a Banc One company. Affinity Partners is located at 30 Washington Street, Wellesley Hills, Massachusetts, 02481. Phone: (781) 239-9310. Fax: (781) 237-6578. For additional information, contact Douglas Furbush, Senior Vice President of Affinity Partners at (781) 239-9310 or via e-mail: [dfurbush@affin.com][1]

Visa U.S.A. expanded its partnership with the National Consumers League yesterday to educate consumers about debit cards. The program, known as the ‘Debit Education Partnership’, is designed to educate consumers on how debit cards may be best used to complement credit. A recent survey commissioned by Visa U.S.A. showed that one out of every five consumers polled are not fully aware of the differences between a debit and a credit card. Yesterday’s initiative will complement the debit education brochure the two created in 1997 which has been distributed to 235,000 consumers. The new program will also include nationally broadcast public service announcements, enhanced consumer education material on Visa’s web site and educational efforts through television, radio, and print, including a radio media tour.

TeleCheck Services, Inc. and Deep View Systems joined together Monday to create the industry’s first on-line neural network-based system to process all check authorizations. Currently, 180 customized networks are on-line. TeleCheck’s existing risk management system utilizes scorecards to evaluate more than 30 relevant transaction variables, including type of merchandise, check number and time of day, to determine the likelihood that a check will be good or bad.Neural networks take scorecard technology much further, recognizing patterns and uncovering hidden relationships in complex data sets.

Anacom Communications Inc. announced Monday it is rolling out its Internet Fraud Screening program for merchants conducting business on the Internet who are concerned about the potential for fraudulent credit card orders.

Hosting companies and Internet Service Providers will be able to offer the benefits to their commercial accounts as well. IFS is a series of filters which can be customized by each merchant to meet their specific needs.

Anacom ([www.anacom.com][1]) is a leading provider of low cost order processing and real-time payment solutions for merchants, shopping cart vendors, hosting companies and ISPs conducting e-commerce on the Internet.

Anacom acts as a subscription-based service bureau allowing merchants and resellers to outsource the highly technical challenge of enabling their sites to accept credit card payment transactions. Their services all stress simplicity in allowing the merchant to become e-commerce empowered without installation or management of payment software.

Working with hundreds of their merchant customers, Anacom’s extensive transaction processing experience allowed them significant insight into merchant concerns and experiences. They have responded with IFS, which can be customized by each merchant.

IFS is available to all Anacom customers and the customers of all hosting companies, shopping cart vendors and ISPs who utilize Anacom as their transaction processing engine. IFS is intended to dramatically reduce the number of potentially fraudulent orders and chargebacks experienced by those selling on the Net.

IFS automatically applies a number of basic filters such as card number verification, field integrity checking, address verification (“AVS”), and a proprietary duplicate transaction avoidance system, but also allows the merchant to customize additional fraud screening filters at green, yellow or red levels on a number of optional parameters including:

Anacom is best known for its popular SecurePay service which provides a universal real-time payment gateway for existing web sites. The IFS functionality can be seen in a detailed demonstration at their web site. Anacom’s web site is

CSI Credit Systems International Inc. President James Christensen announced Monday that the Superstar Group Ltd., a Richmond based group of sport apparel and footware companies, has chosen CSI to develop and operate a customer loyalty system for them. The program will be operated at 54 store locations in British Columbia, Alberta and Ontario.

The Superstar Group will be launching two customer tracking and loyalty programs using CSI’s ERNEX system. The Superstar Ultimate Card program will operate at Superstar, Planet Superstar, Lady Superstar, Superstar Kids, Champion Store, Adidas Store and Nike Shop locations. The Shoes Strings Plus Club card program will operate at all Shoe String locations. ERNEX features such as Instant Win and Electronic Gift Cards will be used in addition to the “points” based rewards program. CSI’s terminals will also be used to process credit card and Interac debit card payments at all locations.

The real-time ability of ERNEX will inform Superstar customers of their “point” totals immediately at the point of sale, by printing the information on the customer’s receipt. CSI will provide detailed reporting on participating customers purchase patterns to Superstar management on an on-going basis. CSI derives revenue from the sale of its GT-100 terminals and the processing of loyalty transactions.

“CSI’s experience in executing card based loyalty solutions and the ease of integrating their solution into our retail operation were big factors in choosing CSI,” says Andrea Johnston, Chief Financial Officer for the Superstar Group. “ERNEX’s host based flexibility means that future program improvements will be quick and cost effective, preserving our ability to keep programs fresh for our customers. This program is a major initiative for us and CSI has become an important partner.”

“Superstar is a leader in their industry and we are very pleased to have such a high profile client participate in the ERNEX network,” says James Christensen, President & CEO of CSI. “Superstar is a believer in the value of customer loyalty and retention.”

CSI is positioned to lead businesses into the future through the innovative management of transaction information utilizing its multifunction point of sale terminals and advanced parking equipment, value-added card programs and data collection.